Brian Carden "Insights" - Financial Advisor Nashville

Memories of the Sears Wishbook

            What is it about Christmas that creates such nostalgia?  I remember when I was a kid in the 60’s, around the first of November, my brother David and I would impatiently wait every day for the mailman to deliver the first true signal that Christmas was coming….The Sears Wish Book!  Hopefully, you’ve just smiled…for whenever I mention this to someone, there’s a nice warm feeling about hearing those words…sort of like Homer Simpson when he thinks about donuts.  I found this cover of the 1966 issue…that would have made me eight & my brother David six…and I sure don’t remember our catalog looking this nice…ever!

 
               I remember Mom trying her best to help us avoid a fight when determining who got the first shot with it.  I guess she was lucky that it was just the two of us.  We didn’t have a sister, so the girls’ section usually wound up immaculate.   However, the boys’ section was altogether different, as we usually studied it line-by-line, page-by-page.  It was dog-eared, circled, marked up, numbered, prioritized, and written in by both of us.  If we had spent as much time with the World Book encyclopedias (there’s another memory for you) as we did with this catalog, we would have been considered child prodigies.  I guarantee you that I could find that football game with the vibrating field in about 30 seconds or less! 

             My memories take me back to the Sears & Roebuck on Central Ave. in Knoxville, which was almost identical to the old Sears store on Lafayette St. here in Nashville.  We would always walk through lawn and garden, through the appliance section, into the main store, and right into the candy counter.  Most times, we got dragged there for school clothes (Yuck!), but after that book came in the mail, we knew exactly where we were going….downstairs to the Toy department…and to see the big guy…the head honcho, the one guy that truly understood what that Wish Book meant to us…Santa Claus! 

             Our experiences with Santa weren’t as dramatic or tragic as the kids in “A Christmas Story”, but the memories of that Sears store are etched in my mind forever… as are the framed pictures of me and David on Santa’s lap in my home.  As I watch those old Super 8 movies of our childhood, (converted to DVD, thank you) I remember David and I on Christmas morning in our bedrooms, both feeling like two thoroughbreds in the gate, just waiting for Mom to give us the “all clear sign”.  It wasn’t Christmas without Dad and his movie camera with that light bar that had 10000-watt bulbs in it.  We still laugh about being partially blinded by it trying to get to our presents.

             Today, Christmas in so many ways is so different.  The Sears I remember is gone.  The Wish Book now has an I-PAD app.  This fall, both Mom and Dad have already proclaimed “Don’t get us anything as we don’t need anything!”  Yeah, whatever.  It’s probably going to be a “point & click” shopping spree online and gift cards for all…with a few surprises thrown in!  Last year, David asked for & got no telling how many E-Bay gift cards.  I think he had spent all of them by Christmas afternoon…me, I’m more of an Amazon.com guy.

             I consider myself a blessed man in that for as long as I can remember, the Carden family has gathered around the tree in my parents’ living room, all of sitting in the same exact places as mandated by Chase & Courtney, my nephew & niece.  It’s their job to hand out presents and we go around the room, opening gifts one at a time.  Dad doesn’t get as much chocolate as he used to, but it’s a sure thing he’ll get it. In spite of their proclamation, Mom & Dad usually are genuinely surprised.  As Mom says, after 59 years of marriage, it’s hard to surprise Dad…but we always seem to succeed.  Besides, being sneaky is half the fun of buying gifts in the first place.

             Yes, Christmas as I knew it as a kid will never be the same.  My Wish Book is now a personal journal of words, thoughts, experiences, emotions, goals, wants, prayers, and dreams.  The only pictures in it are those created by my mind and my heart.  Christmas today is about family and friends.  My clients seem to become my friends, and sometimes my friends become clients…and all of them become a part of my own personal family. 

                 So, with all my heart, please know if you’re reading this, that you are a part of my Wish Book, and I wish you all of the love, hope, and joy of this Christmas and Hanukkah season. 

Regards,

Brian

Brian_Carden@PeachtreePlanning.com

www.briancarden.com

 

           

           

           

Really?...Are You Kidding Me?

            It never ceases to amaze me just how people think, what people do, and how they are affected by those that have no reality about what they are talking about.  There are so many financial myths out there that can be completely blown to bits by reality, but they have been there so long that they’ve become common practice and therefore we as a society believe that they are true…and worst of all, that they actually work for us!  It’s gotten to a point of ridiculousness. 

            I love some of today’s comedians in the way they observe, critique, and comment on what they see in today’s society.  Some of my favorites are Dennis Miller, Chris Rock, and Lewis Black.  When I listen to them, they not only make me laugh out loud, they make sense.  When they are on stage, it seems as if I see the same thing they do…they just have a better way of delivering it.  So, for this month, I thought I’d share some documented facts and figures that I keep in my head…you know the stuff that makes me fun at parties.  If you shared a financial thought with me that I knew to be a myth, if I knew you well enough, it’s what might come out of my mouth after I said “Really?  Are You Kidding Me?”

•  “I expect a 10-12% return in my mutual funds.”  Really?  Too bad it’s not 1982 again as I might buy that.  Average rate of return from 1982-2000 was around 16.8%.  However, from 2000-2010, when you are doing all you can to grow your accounts…ZERO PERCENT.  The only increases have come from your employer match!  So what is your strategy now? (Source: Ned Davis Research)
• After 2008, when I lost 40% in my investments, I moved everything into bonds to be safe.”  Really?  80% of all mutual fund inflows from the middle of 2008 through the end of 2010 went into bond funds.  (Source: American Funds)  From the bottom of the market in October 2008 to the current levels in February 2011, the S & P 500 went from a low of 683 to a current level of 1311…almost 90% growth in 14 months.  (Source: Altegris Investments).
• “I expect to retire in a lower tax bracket.”  Really?  We are at the lowest marginal tax brackets since the Great Depression.  10%.  Given that we are $40,000,000,000,000 in debt (that’s trillion, by the way), how can Uncle Sam let it go any lower?  The highest marginal brackets were during the Roosevelt administration at 90%!!!! Could we go back there again? (Source: Internal Revenue Service)
• “My 401(k) is the best asset I have.”  Really?  How liquid is it if you need cash for a life event, such as your children’s education, or a new career opportunity?  What happens if you lose your job due to outsourcing or off shoring?  Maybe it’s time you learn more about “Use, Enjoyment, & Control”.  What would you say if I told you it might be the worst asset you’ve got?
• “My advisor is my next door neighbor’s grandson’s fraternity brother…and I haven’t seen him in years…but I’d never leave him!”  Really?  So he sold you some mutual funds and that’s about it?  So how’s that working for you?  Still planning on retiring at 65 on that strategy? 
• “I have all my investments at ___________(pick no-load company) because they have very low management fees and I get free advice from them.  Really?  So how’s that 1-800 headset rep doing managing you through this slumbering Bear Market?  Given his vast experience, what is he doing to advise you through all of this global volatility that we’ve never seen before?  Is it just me, or have you ever seen someone working there with gray hair?
• “I think the market has recovered and that we will see double digit returns for quite a while.”  Really?  What financial entertainer told you that?  Let’s see…the government bailout money flowed through US financial institutions, and the printing of new dollars to flood banks with money to stimulate the economy (a.k.a. Quantitative Easing) might have worked for a little while.  However, given that total unemployment is bordering on 20% (including actual unemployment, those that have stopped looking for work, and those “underemployed” that took jobs lower than their former employment) (Source: Dept of Labor), and that the dollar has lost 40% of its value since 2000 (Source: Genworth Wealth Mgmt), where do you see this miraculous recovery?
• “I pick my own mutual funds and stocks as I have as much research available to me as you do”  Really?  So how’s that working for you?  In this technological age, you do have as much access as I, but here’s the deal…my job is not to be a “stock picker”, or to manage your money…that’s another financial myth.  My job is to manage you…your emotions and your expectations.  My role is to find opportunities in the financial world that meet the objectives that we’ve agreed upon and to exploit them in a beneficial way tailored to what you want in life.  “A rising tide floats all boats”, and anyone can make money in a bull market…anyone.  We have not seen a Bull Market in 11 years, and it’s anticipated that we will stay in this slumbering Bear until at least 2019 (Source: Crestmont Research). 
• “Life Insurance is an unnecessary expense and the cheaper it is the better.”  Really?   The Life Insurance industry thanks you, because almost 98% of all “cheap term insurance” plans either lapse or terminate, resulting in lots of profit for them.  If I showed you where utilizing cash value life insurance as a part of your overall comprehensive planning could actually cost you less than term insurance over your lifetime, and allow you to spend your assets more freely in retirement, would you actually listen?  The sad part is that you’ll think I’m trying to make a commission to sell you insurance, but in actuality, if I do my job effectively, you will be the one that makes more money…that is if you will trust me! 

Okay, that’s nine “Reallys?” in one post…probably enough for a while.  I told you I was fun at parties!  Do I have your attention yet?  Traditional financial planning doesn’t work in this “New Normal”, just as traditional asset allocation doesn’t either.  (See the attached white paper for more information.)  Alternative strategies have to be exploited in your thinking, your investments, and your planning…and that is what we do…we think outside the realm of normal, because we know if it hasn’t gotten you there yet, it’s not going to!  Remember Einstein’s definition of insanity?  You’re doing it over & over and expecting the same results…chances are your current advisor is the one creating this for you. I can guarantee the financial entertainers are perpetuating this!

Just like a chess match, one move isn’t going to get you to “checkmate”…it’s a series of thought out strategies…each calculated for a “best case, worst case scenario”.  That’s the way we approach financial planning, and we are very, very good at it.  If you made it here, thanks for reading…I appreciate you!  With that, I’ll close with my same eight words…”I can help you, if you’ll let me!”

The ball’s in your court…

Best,

Brian

Brian_Carden@PeachtreePlanning.com

What I've Learned from 1983-2011…A Perspective

MARCH 2011

            It’s scary to think I’ve been in this industry for 29 years…a good percentage of it was as a wholesaler for major insurance and investment firms, but still…I’ve been in and around it for almost all of my adult life.  This after having said I would never be in this business while still in college.  However, I thought it would be interesting to share what I’ve seen since I got my first securities license back in 1987.  (Two months before the first “big crash” by the way.)

            Back then, there were only “insurance agents” or “stock brokers” as financial planning as we know it today was in its infancy.  The raging bull market from 1981-2000 was just starting to run and IRA’s, 401(k) plans, and mutual funds were just coming into popularity.  My first company retirement plan was a profit sharing plan with an after-tax contribution option and if the law hadn’t changed in 1986, I would have had to stay there for 15 years to be 100% vested.  My first mutual fund purchase had an 8.5% front end load.  Luckily for all of us, that’s all changed. 

            When I first became a retail advisor in the early 1990’s, I had to pick the mutual funds for my clients.  Diversification meant breaking the percentages into large and small cap stock funds, maybe a bond fund to reduce the risk of stocks, and the most I could put into International funds was 25%.  Back then, the market was “sailing along”.  You threw money in the market and it went up!  My recommendations were based which fund family had the best past 3,5, and 10 year performance…or by what funds your company told you were available for you to sell.  There really wasn’t a risk tolerance profile back then…people saw the double digit returns of the stock market, and wanted you to get it for them…and it was fairly easy during those Glory Days of the roaring 90’s. 

           Around 1990, a professor named Harry Markowitz won a Nobel Prize in Economics for his studies on “Modern Portfolio Theory” and how a broadly diversified portfolio could significantly reduce the risk of stocks while continuing to give reasonable returns.  He said it wasn’t market timing or investment picking that made the difference, but that diversification and asset allocation were the keys to managing volatility (aka risk).  I knew these types of portfolios were available, but in their initial stages, those offered catered to the higher net worth investors and the account minimums were in the $1,000,000 range.  It takes the industry a while to adapt to new ways of thinking, but in the mid 90’s, when the mutual fund industry began to create model portfolios that fit the average American, I became a true disciple of his theories.   It took the guesswork out of which funds to pick, and also allowed me to be an advisor and not a picker.  My belief was and still is that my role is not to manage your money, but to manage you and your financial process.  If you worked with me, there’s a high percentage chance you were invested in an actively managed portfolio model…and I was criticized by some for utilizing these strategies because they weren’t aggressive enough!

           In March of 2000, the dot-com bubble burst.  The market was driven to ridiculous highs based on investor greed.  (Easy dot com…easy dot go!)  Alan Greenspan, the head of the FED, (the guy that has his thumb on the pulse of the economy) said on more than one occasion, “The market is showing signs of “irrational exuberance””.  This meant even he didn’t understand why it was doing what it was doing as it was defying common sense.  Companies that in the final analysis had no chance of making a profit saw their stock go through the roof in a matter of weeks…only to be worthless later.   So the raging bull market officially came to an end.  All of those people that were taking way too much risk than they should all got absolutely hammered when the market corrected.  For many, it was like a big “hail Mary” to make up for those years when they didn’t save anything and they saw the market as a way to get rich quick & retire well…at least that’s what they thought.  So they headed for money markets and other accounts that they thought were “safe” only to find their accounts being eaten alive by purchasing power risk (aka inflation). 

           At that time, that was the first real major correction of the last 20 years, so everyone kept saying “Don’t panic, the market will come back…it always has!”  However, you don’t really know you’re in or out of a bull market until Wall Street and the FED says you are.  So, even though we’ve been in this current bear market for going on eleven years straight…with no signs of a real change, the media keeps relentlessly telling us that we are heading for happy days.  So we keep plodding along, being told to “keep sailing, it will come back”.  Financial entertainers even to this day, still use ridiculous hypothetical rates of return of 12-15% in calculating what future account balances will be worth down the road.  CNBC seems to report two things on a regular basis:  The Dow is soaring or the Dow is plummeting. 

           So we go back and forth during the last decade…or the “Lost Decade” as it’s come to be known as the average return in the S & P 500, the Dow Jones Industrial Average, and the Russell 3000 for that decade was exactly ZERO PERCENT.   If we look back to 2008, as Yogi Berra says “It was déjà vu all over again!”  If we thought 1999 wasn’t bad enough, we had no clue 2008 was going to happen.  Just like the big Nashville flood of 2010, it was devastating…no one saw it coming…no one prepared for it…no one in their right mind could have predicted it would have happened…but it did!  The US and global markets were down 30-40%.  Despite my best efforts in keeping my clients’ investment portfolios properly diversified and managed specifically towards their tolerance for risk, everyone’s balances declined.  Managed accounts, mutual fund portfolios, and variable annuities…all of them went down.   Emotions superseded logic in the worst way possible.

           Diversification was meant to have asset classes acting differently during market swings.  Stocks go up, bonds go down, US goes down, International goes up, so on and so forth.  That’s the way it was supposed to work!  That’s what won the guy the Nobel Price for crying out loud!!  However, when we needed it to work the most, it broke down.  When asset classes should have reacted in an opposite fashion, almost all asset classes became more correlated.  By the way, correlation is when two or more items act in the same manner.   Note to self: What has worked for Mom & Dad for the last 59 years in building a wonderful marriage, won’t work in an investment portfolio. 

           Bringing this to the present…you’ve probably looked at your investment statements for the last year.  Congratulations, you were probably up.  The S & P 500 returned almost 15%...most of it in the 4^th quarter.  “Happy days are here again, right?”  Here’s the part that is confusing…I’ve yet to read or hear anything from my various money managers as to why the market was up other than consumer spending was up and consumer confidence was stronger.  Does that make sense to you?  Is the market showing signs of “Irrational Exuberance” again?  Wall Street can’t tell us.  A manager that had a banner year last year is now pessimistic.  One that was ultra conservative last year, all of a sudden is optimistic.  We are still in a Bear Market, and will be there for several more years…that is the only thing Wall Street can agree on.

           So, what have I learned?  Here’s a list of only a few things.  I’ve learned that:

           The market is about as unpredictable as it’s been in my entire career…and it will continue to be for the rest of my career.

           Those too many in our business claiming to be advisors are simply investment salespeople offering a false hope based on past performance and hypothetical future rates of return.

           That a local advisor cannot effectively manage your money, multi-billion dollar globally based entities with teams of researchers & highly educated non-emotional specialists do…and even then, they get it wrong.

           That a single strategy of “buy and hold” won’t work anymore.  It takes so much more than that.

           That “alternative investments” that were once shunned upon, such as currencies, commodities, and managed futures, need to be discussed as a part of your portfolio NOW. 

           That a group of economists can’t agree on anything…and rarely will never get it right. 

           That financial products are only a small part of the equation…if the financial strategies are not there, failure becomes an option.

           That the more I think I’ve learned it all, the more I realize haven’t learned as much as I need to.

           That common sense just isn’t that common anymore.

            There’s no telling how long this list could get...good thing I’m only talking about my profession.  Hopefully, I’ve been honest enough to let you see just some of what I’ve seen for all of these years.  I’ll close with my seven word mantra, which is “I can help you if you will let me”.  As always, thanks for reading…do me a favor…add someone to my monthly subscription list…maybe they need to talk to me. 

Many thanks!

Brian
Brian_Carden@Peachtreeplanning.com

What Type of Investment Are You?

            If you were to categorize yourself, what are you:  stock, bond, mutual fund, option, derivative…or maybe even a “credit default swap”...that nasty little thing that no one knew about that caused Wall Street to crumble?  Which would you be?  Here’s where the distinction lies...and it’s fairly simple to differentiate.  If you are gainfully employed by someone else, I’ll call you a “W-2”.  If you are Self Employed and a Business Owner, I’ll call you a “SEBO”, which is an acronym I’ve created for you.  (Entrepreneur has to be one of the most overused words in this decade in my opinion.) 

So, you are a W-2, your talents and skills are technically owned by your employer, and your productivity creates income for that employer.  The only increase in your value comes with raises or cost of living adjustments.  Therefore you are a BOND.  Your employer “buys” you with a stated salary, and you generate profit for him.  You have a feeling of some safety by being a bond, but it could be fleeting.  Oh, in this volatile employment environment, technically, you are a “CALLABLE BOND”, as your occupation could be outsourced or “offshored” and your employer could claim your salary back as if he sold a bond. 

As a bond, the only way to diversify is to invest into stocks.  You are probably doing this already by funding your 401(k).  It’s the norm of our generation.  However, let’s look at the ramifications of what you are actually doing.  The last 11 years have generated a zero average annual rate of return in stocks and stock mutual funds.  It’s highly likely the only gains in your account have come from employer matching, and that has probably diminished as well over the last decade.  I think it’s a fair assessment that income taxes won’t be any lower for the foreseeable future…so there’s a high probability that you could be setting yourself up for “reverse tax planning”…deducting in a low bracket and taking income from it in a higher bracket.  We also know that trillions of dollars of investable assets are being “disinvested” into money markets and bond funds.  80% of all new mutual fund inflows in 2009 and YTD 2010 are going into bond funds.  If you are one of these people, you are doing “reverse diversification”…meaning you are becoming a bigger BOND.  If you cannot hear that lit fuse attached to your back, trust me, it’s there.  Your bubble is going to burst.  (Click my e-mail address at the bottom for instructions on how to diffuse your “bond bomb”.)

Now, let’s talk about you, “Mr. or Ms. SEBO”.  You are in control of your own destiny.  You wake up every morning in search of growing your business and your marketplace.  You also go to bed every night worried to death about the risk that you are taking by doing so.  The increases in your value come from growth.  Therefore you are a STOCK.  You are 100% at risk, and your value can go to zero.  So to diversify, you must invest into bonds, or bond equivalents.  If you’ve been wondering why you are emotionally battling with your advisor about putting more money into stock mutual funds, there’s your answer.  By doing so, you are naturally over-diversifying…also known as redundancy.  He is telling you that you should take assets from your SEBO, of which you understand the risk and volatility, and put them into another risk pool that you do not.  By following his advice, possibly funding a SEP or other retirement plan, you are also reducing or perhaps eliminating the current opportunities of USE, ENJOYMENT, & CONTROL of those assets…and again, there has been no return for the last 11 years! 

Enter THE BANK CALLED YOU.  It’s a way of diversifying YOU.  By utilizing a different type of bond portfolio, automatic diversification is created against the risks that you take every day.  It’s an investment that never goes down, can only go up, and has no correlation to the volatility of the markets…both stock and bond.  It creates a synergistic relationship with the SEBO in you, and enhances USE, ENJOYMENT, & CONTROL, of your assets.  It takes risk off the table, while creating diversification and tax efficiency of those hard earned assets.  It also builds a bigger moat of protection around your castle of financial and professional assets. 

To learn more about it, please go to my website & watch the videos.  You will probably want to learn more, so click my e-mail address and contact me.  I’ll introduce you to the concept and show you all of the strengths and weaknesses of this strategy.  No sales pitches, I promise!  If you are a SEBO, or know someone that is…it’s time you take me up on that Starbucks latte. 

Regards,

Brian Carden
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

What Would You Do?

            This post is not about your “bucket list”.  I wrote on that a long time ago after the movie came out.  This is hardcore stuff about real world conversations that I have had with people just like you.  I’ve looked into the eyes of a husband and father that was just deemed terminal by cancer and told him what the financial options were for his loved ones if he dies…and if he should miraculously live.  I’ve squeezed a man on the shoulder because he was unable to shake my hand because of an accident that rendered him totally and permanently disabled…and said he didn’t need disability insurance when I mentioned it to him years before.  I’ve met egocentric men, thinking that they knew everything but were humbled by the fact that their career path was at its end due to corporate “off-shoring” of their job, their big title, and their six figure income.  I’ve sat with people that bet their entire life savings on a high flying stock pick from a friend and lost it all.  So…what would you do…?

         …if you knew you were going to die in 6 months?                 

...if you knew you would be totally disabled in the next 12 months?

...if you knew you were going to become a financial failure in the next 18 months?

…if you knew that the “roaring bull markets” of 1981-2000 are gone for good?

           What would you do?  It’s 2011!  Would you do what you’ve done to date, which is say that “I don’t need that much life insurance” (even though it’s available to you right now)…or say “Disability insurance is too expensive, besides, I can always work if I’m hurt.”  Or perhaps, you’ve told your wife that “I will always be marketable in the workforce…don’t worry”.   Oh yeah, I can’t leave out my “red flags” on the financial entertainers as they’ve totally duped Americans into thinking that they will be comfortable in retirement by following their continually recommended philosophies that they cannot validate…and they do it on a daily basis.  Where is it written that Americans deserve a double digit return in their 401(k) plan and a guaranteed employer match on top of that?

           So…what would you do if faced with one…if not all of the above listed questions?  Are you still going to ignore it?  It will get better, won’t it?  That won’t happen to you, will it?  You’ve got it all under control, right?  If you’re reading this…forward it to your spouse or significant other and let them answer these questions for you.  Trust me the answers you get won’t be the ones you’re thinking of. 

           Are there more efficient strategies?  Absolutely.  But the key is prudent planning before “bad things happen to good people”.  I’m not talking about products here…but serious, roll-up-your-sleeve-planning using “worse case scenarios” and cost recovery strategies where dollars leaving their lives could have been “recaptured & redeployed”.  Could I have helped that man buy the appropriate amount of life insurance before he got sick so that his wife would be somewhat relieved? Yes…actually, his “human life value” or to put it in terms of your homeowners insurance, his “replacement value” was $10,000,000.   The friend with the total disability couldn’t make it on 100% of his salary, so how is his family going to get by on 0%?  That egocentric man could be in great shape from a “use, enjoyment, and control” perspective had they followed some simple advice and reallocated monies into more effective investment and savings buckets.  And if you’re thinking that this market will recover anytime soon, and that as the financial entertainers keep preaching, you will “retire in a lower tax bracket”…well…”A fool and his money are soon parted!”

           I must admit, I cried when I got home after meeting the man with terminal cancer…it broke my heart that I couldn’t improve their financial situation…but I hope I did help them emotionally.  My job that evening was to evaluate where they were from a “YOU ARE HERE” perspective…and to give hope to the wife that at the least, she could sleep a little better that night.  The best words I could have ever said came out that night…and that was “Given where you think you are, I think you’re going to be okay”.  I trust she might have gotten a good night’s sleep that night…and that’s why I do what I do.  By the way, they didn’t have updated wills!  That’s done now too…a little detail they had overlooked.

           This one came from the heart…It’s not full of metaphors and word pictures, of which I seemingly have gotten a reputation for among my friends, clients, and tongue-in-cheek critics.  Everything above is real…I can’t make it up…I carry these memories around with me.  I’ve said it all along; I CAN HELP YOU IF YOU WILL LET ME!!!!  Maybe now it’s time…it’s up to you…

Have a Great 2011!

Brian Carden
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

Trusting in the Holidays

            It’s always interesting as to how I write this holiday post each year.  Sometimes the words flow like butter…sometimes like barbed wire.  For the majority of my year’s writings, I can look back and see a lot of logic through the paragraphs and factoids that I’ve gotten on the pages.  Occasionally, I’ll have an emotional piece like last month, when I wrote about Dad.  It’s easy to write about him…and if you know me at all, you know why.  Right now, I’m probably more emotional than logical…it’s been that kind of year. 

            In reflecting back on 2010, it’s been a good year for the most part.  There are new friends and clients in my life that were not here 12 months ago.  Also, as a firm, we are blessed to have helped a lot of people that have come through our planning processes here at Peachtree. When I say “I can help you if you will let me!!”  I’m speaking for everyone here and I’m saying it passionately.  We believe in what we do.  In preparing to talk to an investment club later this month, I saw a chart on one of my regular reads showing the connection between “Wall Street and Main Street” were at polar opposites…meaning the trust of our industry has pretty much gone out the window in relation to the past performance of the markets. I can’t really blame people for feeling that way either.  I’ve seen marketing pieces from investment companies that have to go back a full 15 years just to show a positive average annual return in their funds.  This sleeping bear market of 11 years and counting is snoozing along with no end in sight.  The investment firms that I turn to for my information say we might be on the back side of this bear market…which still means it could be another 6-8 years of zero percent average returns. 

           The industry seems to think that if you advertise enough on Sunday sporting events and show enough happy couples living the dream of a comfortable retirement, that it will convince you that they are trustworthy.  You trust that right?  Trust is something that is earned, not given.  It’s also something I know I can’t advertise. 

            Several years ago, I wrote a piece entitled “Memories of the Sears Wish Book”.  One of my favorites as back in the day before “big box stores”, the Internet, and of immediate gratification, this wonderful publication was as good as it got!  After hours of reading, studying, writing in, marking up, and dog-earing pages of that amazing catalog, my brother David and I got to go see Santa.  The amazing thing was that both David & I trusted him!  Call it naïveté.  Call it what you want…but we trusted Santa Claus.  The anticipation of sitting on Santa’s lap (at the Sears on Central Ave in Knoxville) and telling the big guy what we wanted for Christmas…well was pretty darn awesome for two kids in the 1960’s.

             The proof was in Christmas morning…over those years of trusting, Santa brought a new bike, figure eight slot car racing set, Lincoln Logs, LEGOs, numerous Hot Wheels & Matchbox cars, and the crème de la crème…the football game with the vibrating field and the decals for all of the NFL teams!  (Ladies, I’m sorry…I didn’t have a sister, so I can’t relate to Barbie dolls and the Kenner EZ-Bake Oven.)  Amazingly, we somehow got what we wanted…we didn’t get it all, mind you.  But we always got the top 1-2 items on the list.  We didn’t know he wasn’t really real…until we saw price tags on a box one year…but regardless, we had faith and trust in Santa.

            This Christmas I have a lot to be grateful for, as my family circle is still intact…in fact there is a new addition, as I have a new dog, Charley…a two year old rescued west highland terrier…and he will experience his first Carden Christmas.  For the most part, my own personal joy of Christmas is based on our family circle.  Mom & Dad are continuing to do well…my brother David, his wife Cindie, daughter Courtney, and their son Chase (my “mini me”) will all be together once again.  As long as our “circle remains unbroken”…all will continue to be okay.  I have the faith and trust that it will continue to be.  

           In keeping with my initial thoughts…now is that time of year that I specifically get to share with you that I am grateful for the trust that you have shared with me…from being your “trusted advisor” to being a trusted friend.   Perhaps we have never met, but you are a loyal reader.  If that is the case, maybe 2011 will be the year that you really start to question how you feel about trust, and maybe we might be able finally have that long promised latte’ together to learn why you feel that way.    

           It’s my hope that you have a blessed Christmas and Hanukkah season…that it be covered in love, peace, friends, family, and of course the trust that maybe…just maybe…if only in your memories…there really is a Santa Claus.

Peace,

Brian Carden
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

Sailing and Rowing

            If you’ve looked at your investment statements lately, you might notice that there are no parentheses around your annual returns.  Yes, these double digit returns, are a pleasant change from the last couple of years, but the big question is how long this will last.  Given the current economic conditions, what are you doing right now to prepare for what lies ahead?

            This year, we have been fortunate to get reasonable returns in our equity investments without doing a lot except stay the course.  This is called a “sailing” strategy.  The winds are at our back.  But what did you do when faced with a headwind?  Did you finally give up, surrender, and disinvest into cash or money markets?  …or did you look for alternative strategies that made good investment sense?  To prove my point, the average annual return of the S & P 500 since 2000 is a NEGATIVE 4% (source PPCA, Inc.) 

            Given this statistic, if you think about how to move forward when the wind is in front of you, this is called a “rowing” strategy.   What can I do to keep moving forward when the markets are making it difficult for me to get any return at all?  Granted, last year, all bets were off as all asset classes were down.  US stocks, US bonds, and International were all in negative figures…and even the safety of money markets was in question for the first time in my professional career. 

            If you are insecure about your financial future, don’t feel alone.  The person in the car beside you, or the office next to you is feeling the same.  No one feels secure these days.  Unemployment is affecting the middle to high income earners and not just the laborers and “blue collar” people.  The common thought in our office is that taxes have to go up to support all of the government bailouts, subsidies, and support programs. 

           You’ve probably heard that the US dollar is becoming less and less valuable in the global economies.   To prove this point, after I got back from a much needed vacation to Cancun a few weeks ago, I got my bank statement.  All of my debit charges had an additional currency exchange fee as the dollar decreased in value to the peso in that brief couple of weeks.  Quite eye-opening actually! 

           What’s the point to all of this?  You are probably hearing about a lot of “tactics” to make money in this volatile economy.  Tactics might work in the short run, but it is prudent “strategies” that will help guide you through all of this market volatility, not to mention the inclusion of other economic drags, such as inflation, taxes, the cost of living, and life events.  Anyone can create “sailing” strategies.  However, what makes a “rowing” strategy work is the “coxswain”…the person at the front of the rowboat coaching and giving direction to the crew.  In the financial world, the coxswain should be your trusted specialist.  He is the one that you need to trust to guide you through those headwinds. 

           Given what lies ahead, “all things financial” is not a “do it yourself project”.  If you are somewhere between “shoulda, woulda, coulda” and “fixin to get ready to”…let’s talk.  There’s never been a better time to have that cup of coffee. 

Best wishes,

Brian Carden
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

Walking Down Gene Carden's Road

           Inspirations come to me from a myriad of places…sometimes, I’ll hear a song lyric…or perhaps see a quote that resonates…and often times, it’s from the vantage point of a pew on Sunday mornings. Recently I heard Mike Glenn state that “Common sense isn’t all that common.” Needless to say, I grabbed one of my 3 x 5 cards and started writing. I’ve said it before with total conviction and I’ll continue to say that our Senior Partner Corky Dawes, who is a true friend and mentor to me, says that I have the third most important occupation in your life, behind your physician and your pastor. By the way, Mike is the pastor at Brentwood Baptist Church…you know, the one on Concord Road at I-65 that looks like a small community college with a steeple.

           One of the things I most enjoy about Mike is that first of all, when I’m in the room with several thousand other people, it always feels like he’s having a conversation with me…and only me. There is not a pulpit, podium, nor a teleprompter anywhere…he’s just speaking from his heart. If you’re a member there, perhaps you feel the same as I. His last series was comparing where one pledges their allegiance: to the American dream of success, stuff, and the like…or the spiritual world of living a Godly life and using the Word as a roadmap. He quoted Thomas Jefferson who wrote the Declaration of Independence, and more specifically he talked about where Jefferson wrote about the “pursuit of happiness” and not “the possession of it”. We do like to own stuff here in Williamson County, don’t we?

           It’s funny, because we all can laugh at all of the televangelists that we’ve seen through our years of watching TV. I used to do a great Ernest Angley impersonation when I was a kid. Remember that guy? He was hilarious…but then again, I saw him for who he was. There were only three channels back in those days, so on rainy days, when we couldn’t go outside to play, we watched stuff like this. “Say ba-by…out demon spirit…come out!” I didn’t realize that one could create so many syllables out of a name like Jesus…“Jae-eee-eee-sss-us”.

           Why do I mention this? Simple…for every religious nut out there, there are men of God like Mike Glenn who can stand in front of everyone he meets and speak from his heart. He basically calls it as he sees it, and he calls it with conviction. He has a lifetime of experiences, studies, and life lessons that he can pull from on an immediate basis. When Mike talks, I listen…intently…I’m always listening for that “ah-ha moment”...that moment when I hear something that resonates with me that I can bring back to my desk and write about with financial overtones and my own set of experiences, studies, and life lessons…just as I’m writing to you right now.

           You might think that I have the audacity to play the religion card and to compare myself to Mike. If that is the way you feel, then please stop reading, close this screen, and move on. There is no sense in reading any farther if that thought has entered your mind. One of my favorite sayings is “The Lord Wants spiritual fruit, not religious nuts.” Needless to say, I can’t stand religious nuts, and here in Nashville, the buckle of the Bible belt, we have more than our share of them…especially in my business. Unfortunately, in the last 2-3 years, there has been a lot of harm caused by financial advisors professing their faith as a marketing ploy to get people to invest their hard earned dollars with them. Unfortunately for the investor, those unethical schemes cost the clients millions of dollars and put the advisors in prison…and the sentences can’t be long enough to suit me!

           Mike is a battery recharger for me. I show up on Sunday sometimes drained by my prospects, friends, and even clients. The media makes everyone think that being a financial advisor is an easy job where all you have to do is just talk to people, get them to sign a few forms, get paid very well, and then spend the rest of your time at the country club schmoozing more people to sign a few forms. Trust me…there’s a reason that my industry has a 95% failure rate of new hires in their first 12 months of employment…it ain’t that easy! Mike helps me be made up of the best “spiritual fruit” I can be.

           Where I do see myself like him is in my conviction to share the truth with you on matters that I see myself as knowledgeable on my areas of expertise as Mike considers himself. And I have the passion to stand up for what I know is truthful and in the best interests of everyone I meet. Just as there are “religious nuts” in Mike’s world, there are “financial gurus” in mine. Those that seemingly have some credibility because they are behind a microphone of in front of a camera, but can do more harm with their words than any televangelist can ever do.

           So, 28 years later…here I am…after having numerous conversations with God as to why this industry chose me. At first it was a job…then it became an occupation…then later a career…and now after some answers to a lot of my questions, a true calling to help people, I find myself listening to a man like Mike Glenn asking me “Brian, on what road have you built your life?” I’m looking at my 3 x 5 card right now with those words written on it. I will tell you for all of the glass half empty days; there have been an abundance of glass half full days. A majority of those glass half full days involve my Dad…either in conversation or in thought. If you’ve been a loyal reader of my posts for the last six years, then you know of Dad.

           He’s 85 now…a little slower these days, but he’s still with us. The “Carden foursome” played a few weeks ago…Dad, my brother David, nephew Chase and of course, me. He can’t hit it very far these days, and it frustrates him, but he still hits it straight as an arrow…and to him, being out with us is about as good of a day as he can have...short of being with Mom of course. About three years ago, life happened, and God pretty much told him, “Gene, you’re done working…but I’ll make sure you’re around for a while longer.” At one point, when he was completely out of it in his hospital bed, and we were wondering if his time with us was over, he suddenly woke up, looked at Mom and said, “Hagan, I’m not done yet!” I swear, his last words to us will be “Don’t worry about me, I’m fine.” And I have no plans to hear those words for quite a while!

           Dad would love nothing better than to get up in the morning and go out and make “sales calls” as he calls them. He just loved being in the mix. He told me recently that he never worked a day in his life. He just got up every morning and did all he could to help people. He sold industrial tools, mill and mine equipment, and just about everything a manufacturing plant or construction company could use. If you signed a purchase order within a 100 mile radius of Knoxville, chances are Gene Carden’s card was on your desk somewhere. Recently some of his friends from a company he used to call on looked him up in the phone book and called the house. Mom answered and they asked if this was Gene Carden’s house and she said yes. Then they asked “Is he still alive?” To which Mom answered, “Yes he is, would you like to talk to him?” Needless to say, Dad went down and had lunch with them a few days later. It made him feel so good to know he was missed and that he made a difference to those people. There is no telling how many people he has touched through these many years of “doing what Dad does”.

            It’s funny. I’ve never seen him read a Bible or quote scripture…never seen him pray other than saying the blessing at the dinner table…never seen him do a lot of things that you would think a lot of “religious men” might do. The closest he probably came was telling me his version of the Golden Rule, which was “To have a friend, you’ve got to be a friend.” Then again, I have never met a man who “walks the walk” any more than Dad. I’ve learned through him that it’s my walk that makes me who I am…not my talk. It’s the consistency of getting up every morning, and doing your best to help someone else. Not the money you make, the notoriety you get…just get up every morning and do all you can do to help someone else. Dad doesn’t feel the need to tell me about his walk with God…he’s just shown it to me for all of my 52 years.

           He has to walk in the evenings to keep up his strength, and when he does, he will call me a couple of times a week and we will talk about my day…who I saw, what I did, the frustrations I have in getting people to understand I’m truly trying to help them, etc. The greatest compliment I’ve ever received came from a man who knew Dad for years and he told me “Darn it Carden, you’re just like your old man!” To which I replied, “Yes I am!” So when a man like Mike Glenn asks me on what road have I built my life, it’s easy for me to look at the road that Dad continues to walk.

           In my walk, I do everything I can to be like Dad…and to be quite honest, some days it’s just hard…sometimes downright frustrating. Where Mike Glenn can stand up on Sundays and tell you what you’re doing right now is not going to get you to where you want to be from a Godly perspective, I know in my heart, and with 28 years behind me, I can tell you what might have gotten you here will not get you there from a financial perspective. Or in some circumstances, I can tell you where you would have been if you hadn’t listened to one of those financial entertainers that you think are “all seeing, all knowing”. They call them “financial gurus” now don’t they? Whatever…regardless, whatever you think. I can not only state with all of my heart and soul, but also numerically validate, that a high percentage of what you hear and read is wrong regarding investments, insurance, and many other things financial. You can’t get financial advice through the media, just like you can’t get a haircut over the phone!!

           I’ve sat and listened to potential clients rationalize their misguided beliefs to me over and over again. I’ve had friends who thought that since they made more money than I did, that they were smarter than I, and that they knew exactly what I did for a living. To which I replied, “You have no clue what I did, because if you did, you would realize immediately that I could help you!” But I guess that guy at the brokerage firm was still promising him 12% returns like the financial entertainers are promising you every time you turn on the radio or television. I’ve had men look at their wives and tell them point blank that “They weren’t buying that much life insurance on themselves.” To which I thought, obviously, you love the money it takes to buy the insurance more than you love your family. And on a daily basis, I find myself quoting the comedian Ron White, who gave us “You can’t fix stupid!!”

           Wow…this piece didn’t wind up finishing the way it started, did it? But as Popeye says “I am who I am!” In my case, I don’t apologize for it. I know the quality of work we do here at Peachtree Planning of Tennessee. I know the difference between an investment strategy and a mutual fund or variable annuity sale. I know a product peddler when I see one. I know a faux leather binder full of facts figures and assumptions doesn’t make a financial plan. I know when someone has been taken advantage of by someone claiming to be a “fee based” this or “certified” that, and if someone plays the “Christian” card, it has always been my nature to run like my hair was on fire…regardless of what industry they were in!

           And, I know who I am…and what road I’m on. Thank you Mike for your words of inspiration…and of course, thank you Dad…I love you and am proud to be your son. See you around the family table in a few weeks.

Have a wonderful Thanksgiving!

Brian Carden
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

Deus Ex Machina

OCTOBER 2010 INSIGHTS

...from the desk of Brian Carden, Financial Advisor

            Oh would my 8^th grade Latin teacher, Miss Ahler be proud.  40 years later, I'm speaking her language.  The English translation of this phrase is "God from the machine".  Where it's applicable is usually in literature.  It is a device used in the plot whereby a seemingly impossible problem is suddenly and abruptly solved with the immediately created and unexpected intervention of some new character, ability, or object. 

            If you enjoy a good novel as much as I do, you dive deep into hundreds of pages waiting for the big twist in the plot that either solves the mystery, or brings all of those different subplots together for the big finish.  You're entrenched in this story, and then all of a sudden, something, or someone appears from nowhere and amazingly, the dilemma of the created plot is solved.  It makes for a wonderful read if you're strictly talking about literary fiction.

            However, in the world of "financial fiction" it's a different scenario.  Let's think about this for a moment.  Our parents and grandparents world of guaranteed monthly pension incomes is close to extinction.  The thought of receiving Social Security benefits in the future is not as guaranteed as it once was.  If you stayed fully invested in stocks and stock mutual funds for the last decade you lost money (average annual return = -.2%).   To top this, the "financial entertainers" are still spouting double digit returns and a retirement where you won't out live your money.  I don't get it how does that work?  One was on an Internet video proclaiming a future value number in retirement where the calculated average annual return (that they didn't have to disclose) was close to 19% and I can't make this up another was on the front of a cereal box in the grocery store offering the chance to win their financial plan if you bought that brand!!

            So the guaranteed pension income provided by corporate America is going the way of the albatross the future of Social Security is in jeopardy, in spite of trusting your advisor's constant words of "hang it there, your account will recover", you're still not making any noticeable progress in your equity accounts, our country's global strength is diminishing daily, and I can go on and on.  So I ask you: Where is your "Deus ex Machina"? 

           In your "financial plot", what amazing intervention do you expect to happen that will solve your current and future financial life?  It's not hidden in rates of return or a "one size fits all" financial plan and it is surely not on the radio, television, or newspapers and no the Lottery doesn't count either.  If you can't think of anything even remotely realistic, maybe it's finally time to take me up on that free Starbucks latte. 

Best,
Brian
brian_carden@peachtreeplanning.com

 

PS:  Thanks to Vince D'Adonna with Strategies for Wealth in New York City for initial thoughts on this idea.

 

 

My View On The World

SEPTEMBER 2010 INSIGHTS

…from the desk of Brian Carden, Financial Advisor

     Satchel Paige is quite an athlete and a great story in the annals of professional baseball. He was pitching in the major leagues well into his 50s. And like Yogi Berra and Casey Stengel, he was very quotable. Of my favorites is “It’s not what you know that hurts you. It’s what you know that just ain’t so!” Given this as a mantra, I have a huge bias against most of what YOU are exposed to regarding money, investments, and all things financial. It is continually amazing to me how the media continues to confuse virtually everyone. Let’s list them shall we?

• Jim Kramer ranting on CNBC about how picking US stocks is the way to financial success.
• Everyone else on that station reporting every single bit of minutia that might make a difference to one’s portfolio…and generally doesn’t make a bit of difference…but sells a lot of ads!
• Sam Waterston telling you that you can have financial freedom by doing it yourself with TD Ameritrade.
• Wall Street based wire houses telling you that they know how to invest, when to invest, and that you should trust them because they are who they are…period. (Can you say credit default swaps...I know you can?)
• Financial entertainers spouting their own brand of disoriented and invalid information to the masses that seem to think they are credible because they have a camera or microphone.

    Now, the second part of this…after 28 years of “reading between the lines” I continually shake my head at what the mutual fund industry puts out there for advisors to use to convince YOU to invest your money with them. Let’s look at a few of these:

    It’s an industry statistic that almost 70% of all advisor based mutual funds are placed with one particular fund family. This one has a bias toward investing in large US based companies and one that sells its funds based on historical performance and lower than average management fees…but has to put in every brochure or publication for you to read “Past returns aren’t predictive of future results.” Its insane how many people come into our office thinking they are well diversified and all they own are 4-5 funds entirely in this investment firm. This one piece they published for the advisor community went as far to say that this wasn’t a “lost decade”. This because their flagship funds actually had a positive average annual return for the decade ending December 31, 2009. The comparison point was showing that the S & P 500 Index had a negative 1% return. This wasn’t a “lost decade”? Okay, let’s see…I bought this fund and held it through all of the cyclical bears of the last decade and all I have to show for it is 2-3%? Right…still felt lost to me!

    In the period from 1982-1999, if you threw money at the market, the prevailing winds blew it to an average annual return of 16.8%. It was easy. Open your sails wide just put money in an account and watch it go. I actually lost a client because his portfolio only returned 30% in one year and he read in Money Magazine that he could have gotten more if I had invested him in specific fund. Obviously, he didn’t see that I didn’t have a crystal ball in my office, nor do I have one now. This was the biggest run up in our country’s history…from start to finish a total return of 1409% (Source Ned Davis Research). Almost 40% greater than the last bull market that lasted from 1942-1966…but who invested in the market in those days? My Dad and Granddad both had pensions provided by their employer back then, so who needed to invest their own money for retirement?

    What caused that huge run up? Let’s look and see. If you’re going to look at historical performance, you need to look at what caused it. Ronald Reagan and “Reaganomics” cut income tax brackets to the lowest they had been since Roosevelt took office. Here’s a trivia question for you. What was the highest marginal tax bracket in our country’s history? 94% during the tail end of WWII. Roosevelt may have turned our country around with the New Deal and other programs, but he taxed the country to death to do so!

    In 1982, in addition to the Reagan tax cuts, 100% of the baby boomers were fully employed which meant that the largest demographic group in the history of the country were earning wages and paying taxes. Unemployment was at an all time low. In addition to this, in 1980, the Individual Retirement Account and the 401(k) plan were introduced to Americans….and also at that time, the mutual fund became a very popular investment tool for those accounts as they created automatic diversification and lower entry costs into equity investments in lieu of individual stocks. So here comes a huge influx of new dollars into the market invested directly into those US companies. Demand drives up price, so off we go…the bulls are running hard!! Oh yeah, back then, we still made stuff! We proudly said “Buy American” and we did it. It was later in the 90’s that the US stock market growth began to skew corporations to look more toward shareholder returns and overrode employee loyalty. Back in that time, the rule on investing internationally was “never invest in a country whose food you would not eat”. China and India were still third world countries…not the global economic engines that they are today.

    Enter the dot com era of the late 90’s. Computers had replaced thousands of workers. Exporting the manufacture of consumer goods to the Far East and other countries that provided cheap labor replaced thousands more. Initial Public Offerings (IPO) of technology driven companies were happening hourly and even though many never had a dollar of earnings, public demand for them drove their prices through the stratosphere. Even a chat room went public…how does that happen? Well, easy dot com…easy dot go…

    Alan Greenspan, who was the head of the Federal Reserve…the overseer of US monetary policy…said very clearly “The market is showing signs of irrational exuberance”…meaning it’s still going up and I don’t know why!!! So in March 2000, after we survived the millennium scare at New Years, BOOM…We enter the start of our current bear market in March 2000. Tech companies tank…corporate spinoffs with no sustainable growth model goes down with them…bubble burst big time!

    The running joke around Nashville was that if you compared buying $1000 of Northern Telecom stock to buying $1000 of Anheuser-Busch…the beer, not the stock…drank the beer and recycled the cans…the profit of the recycled cans would have been worth more than the NORTEL stock. Moral of the story…don’t invest…drink responsibly and recycle. (As Larry the Cable Guy says, “That’s funny right there, I don’t care who you are!)

    Enter 2010. President Obama has passed what looks like the first of several new laws that sound a lot like socialized healthcare. Income taxes are going up in 2011. The first of what people think will be several going forward. George Steinbrenner, the owner of the New York Yankees, died recently with a $1.1 billion estate (that’s $1,100,000,000.00) and paid ZERO in Federal Estate taxes because the government couldn’t make up their mind about what to do with estate tax laws because they were so wrapped up in healthcare. Almost all of my investment managers that I look to regularly for true unbiased advice are negative about the next 3-6 months. Some are surprisingly neutral, and only one is optimistic, but they are a globally biased money manager and they still see opportunities on the planet.

    For the last 10 years, for “staying the course” for doing what you didn’t do the last time the market tanked and you might have actually stayed the course and didn’t disinvest into cash…for all of those sleepless nights, you were rewarded with a negative return of .2%. 2008 was a reality check for everyone as we had seen 10-20% volatility in the markets…but 40-50%? That’s a hard pill to swallow. So what have investors done since then? Well, if stocks don’t work, then bonds must right? So we’ve seen a huge shift of new dollars into bond funds…80% of all new dollars going into bond funds to be exact in 2009 and year to date 2010.

    So, let’s see…instead of risking dollars in stock funds, people flock to the false sense of safety in bond funds. Per Peter Lynch, the creator of the Fidelity Magellan fund, bond funds can be more volatile than stock funds because they don’t have the upside potential of stocks. For a true stock fund manager, bond funds are designed to do one primary thing: reduce the overall volatility of the portfolio…period. They serve no purpose other than that to an equity minded investment manager.

    Bonds, however, do have the downside issues with interest rate risk. With interest rates at historical lows, and with US government debt at an historical high, if the government increases bond yields to meet the demand of those that buy our debt…namely BRIC countries (Brazil, Russia, India, China)…if they increase the interest rates on newly issued bonds to entice the purchasing of US debt, then existing bond funds with lower yields will decline drastically. Guess what…another bubble yet to burst! So…how are you feeling so far?

    So let’s talk about my new favorite investment metaphor “SAILING & ROWING”. Here’s the simple truth. If we are back in the years of 1982-1999, the winds of fortune were blowing. The bull market was running. If you were fully invested then, you were using a “SAILING” strategy of investing. The winds blow…you’ve got a full sail, and your account goes up…simple. Just like the phrase “a rising tide floats all boats”…a strong wind blows all sails. Regardless of asset class, large vs small, growth vs value, domestic vs international…it didn’t matter…the prevailing winds blew your stock mutual funds went up.

    How about the last decade from 2000-2010? Those winds weren’t blowing…in some years like 2008, the unforeseen headwinds blew you backwards 40-50%. Sure, you might have had a year like 2007 where you caught some breeze, but it was fleeting. All the momentum you thought you had going into 2008 quickly dissipated. If you are participating in a company retirement plan, 401(k) or 403(b), IRA, or a 529 college savings plan…you are in a sailing strategy...PERIOD. Even if you are in a bond fund, given the current climate, you are in a sailing strategy. Your only alternative to this is disinvesting into cash…and logically you know this is not a viable strategy…but trillions of dollars are disinvested there right now.

    One of the problems with SAILING strategies begins with the way that their fund managers are compensated. If I am managing a large cap US stock fund, my performance is measured against my benchmark, which is normally the S & P 500 index. So if I can outperform my benchmark, then my picture will be on the cover of Money, Kiplinger’s, and Fortune magazines, and we will then have a huge inflow of new dollars chasing those returns…oh, I’ll get a big bonus for taking more risk with your money…but then again, you gave it to my fund to reduce your volatility and diversify your portfolio, didn’t you? How does that statement make you feel?

    Enter “ROWING” strategies. Those money managers I mentioned earlier that I rely on for viable non-sensationalistic and logical information understand this. They tell me that we might be on the backside of this Bear market…that’s encouraging…but it still means that we could be in it for another 8-10 years as from their vantage point; they do not see any positive economic indicators that tell them otherwise.

    What are ROWING strategies? What do you do when you have to move your money forward regardless of market conditions? If there are no winds of fortune for you, you have to have oars in the water. I call this an “Absolute Return” strategy. Bonds won’t do this. Cash and Money Markets will not do this either…they may not lose money, but in this economic climate of all time lows, bank savings accounts, CD’s, and money markets aren’t even coming close to even equaling inflation…which at present, is lower than its historical average of 3%.

    A great example of an Absolute Return strategy that is very accessible to you is the cash value account inside an ordinary dividend paying whole life insurance plan. The dividends are subject to change on an annual basis, but the minimum guarantee on the cash in the contract is 4% and it’s also guaranteed to never go down. There you have it…a perfect example of something of which you’re probably very desirous…but you wouldn’t want that would you? Those financial entertainers who are always 100% correct think that is a horrible place to put money!

    Where are ROWING strategies needed; where money is on the sideline for a future use, such as operating capital for a business owner, for college planning where the student is less than 5-7 years away, for diversification against a Bear market with no end in sight, for people who are either close to retirement or who are in retirement who need their assets to keep up with and possibly exceed the cost of living for seniors.

    It sounds fairly simple, doesn’t it? However it’s not. ROWING strategies require considerable skill and work in search of value. Unlike SAILING strategy managers, ROWING strategy managers manage to a different benchmark. They manage to a “zero loss objective”. Simply put, they “win by not losing”. If they don’t lose money, then they are more likely to earn their bonus. You might think you are doing this yourself by not being invested at all…choosing to keep your assets in money markets and cash. Well, these managers are “winning by not losing”…you are “losing by not playing”.

    So let’s recap. Stocks are not the place to be for the foreseeable future…long term, yes, as we will see another Bull market…short to intermediate term, probably not so good. The stability of the US economy has become a servant to the new global powers of China & India. Bonds aren’t much more attractive. Interest rates are at historical lows, and any increases will cause a huge drop in existing bond prices and account values. Money market and savings account yields are virtually non-existent. Income taxes have nowhere to go but up given government spending and a deficit increasing by the second.

    Most of what you are exposed to in the media might not be in your best interests. Financial entertainers are just that…and most of their information is, and has been horribly wrong. SAILING strategies might sound good, but will not work in a secular Bear market. ROWING or Absolute Return strategies are available to you, but not through normal channels…not just any advisor or advisory firm can offer them.

    However, it just so happens that I not only can offer them, but can tailor them to your specific economic desires. As I always leave each writing, I would love to learn more about you, your family, your wishes, dreams, wants, desires, values, and everything that you are saving your hard earned money for. If you wish to learn more about me and my practice here at Peachtree Planning of TN, please hit the contact button on this page, or call me directly at 615.506.0300. I’m betting that Starbucks latte that you won’t…but maybe it’s time to prove me wrong.

 

Regards,

Brian

Brian_Carden@PeachtreePlanning.com

Copyright, 2010, Brian E. Carden

Recapture & Redeploy

AUGUST 2010 INSIGHTS

…from the desk of Brian Carden, Financial Advisor

           Did you ever think that words that sound like military strategies could ever be circled back to discuss money, investments, and all things financial?  I’ve said it before…I’ll continue to say it… "You really don’t know what I do!"  Here’s what you might think I do, because it’s probably what the guy down the street probably does…(1) look at only the stuff that he can either replace or re-do (2) ask you how much more out of your lifestyle budget you can commit to buy more financial stuff (3) give you a sales pitch on a product that will outperform your current stuff ( 4) convince you to work with him because his firm is bigger, better and they are one of the country’s leading providers of…you guessed it…financial stuff.

            What if you were able to look at your financial picture from a totally different perspective?  The only time you create a Balance Sheet is when you want to make a major purchase, like a home or a car.  We all have a Balance Sheet…however; the only thing we ever focus on is the Income Statement…which means we make $$$, we spend $$$, and hopefully we have a few $$$ left.  So that’s where the guy down the street focuses his efforts…strictly from the cash flow that comes into your life.   

           What if I could “forensically” look at all of the intricacies of your financial world?  I mean every moving part…from your car & home insurances, to your benefits at work, to your 401(k) and maybe even to your living expenses.  What if by doing this, I could find dollars that are leaving your life unnecessarily…and you probably don’t even know about it?  If I could do this, then I could have an insight to your “total financial picture”.  Throughout the process, we will discuss why money is a part of the problem that “keeps you up at night”.  We will have a values based conversation and find out what really makes you tick…and how those “psychological” thoughts, feelings, fears, wants, needs, and desires have played into your financial decisions.  “Forensic Financial Psychologist”…I’ve said that before, haven’t I?  (See April 2010.)

           We could then discuss where the inefficient dollars are and discuss alternative strategies to make them more efficient.  Inefficient dollars are those that are leaving your life unnecessarily…only never to return again...but the use, enjoyment, and control of those dollars are gone forever…and forever is a long long time.  If we find those inefficient dollars and “recapture” them if you will…and we have agreed that your values about your money supersede your current tactics regarding your money, then we can create new strategies to “redeploy” those dollars. 

           What have we done?  First, we’ve created a process for you that is living & breathing. Secondly, we can then use it to create financial strategies that will match your values.  Thirdly, we can use it as an ongoing measuring stick to continually search for inefficiencies that we can “recapture & redeploy” throughout your life.  Fourthly, and maybe the most important, we’ve created a strategy where “the efficiency of money can outperform the rate of return on money.” 

           How about that?  If you have more money, you won’t need to chase returns on your money…come challenge me on that one…The Starbucks latte is waiting for you…and I’m buying…how’s that for efficiency?

Best,
Brian
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

Copyright, 2010, Brian E. Carden

Backstops

JULY 2010 ARTICLE POST

…from the desk of Brian Carden, Financial Advisor

        If you ever played baseball or softball, then you know what a backstop is all about. It’s there to make sure things don’t get too far past you. You know when the pitcher throws a ball that is totally uncatchable…or when the left fielder sails a throw towards the plate and its 10 feet over the catcher’s head. When things get outside the lines of play…that’s what a backstop is for…in sports anyway.

        If you look at your life, who can you count on to be your backstop? Yes, you can go to the spiritual side & say that God has your back…he has mine too. Really, when “life happens” as I’ve said a thousand times, who can you really say has your back? If you are as fortunate as my parents, who at 59 years together, make being in love easier than Phil Michelson makes a wedge shot, I know that through all of Dad’s health issues…that regardless of everything that he’s gone through…Mom has always had his back…and regardless of how his physical health has been, his heart & soul has always had Mom’s back…and it will until he takes his last breath…which I hope is a ways away…he just turned 85, and I’m not done with my Dad just yet...because he has always had my back.

        Being a “SM-ISO”…single man in search of…not having someone I can call “my backstop” has always been that big hole in my life. What am I in search of, you ask? That one person I can truly count on to have my back…regardless of what life might throw at me…or at us. Shouldn’t be that hard, should it? If you are one of my good friends & clients reading this…you already know this about me…and I probably know that about you as well. This one, however, is up to God as I’ve thrown it back up to him on countless occasions.

        From a financial perspective, who has your back? Who is that one person that truly has your best interests at heart with regards to your money, goals, wants, dreams, fears, and a plethora of other emotions? Don’t come back at me & say I have an advisor at “Blah Blah Blah Investment Co.” More than likely they are just a “hardware salesman” as I discussed last month. Don’t tell me you’ve got “a financial planner” because that financial plan they did six years ago was outdated the day they gave it to you…it was probably nothing but a snapshot of what was then. Don’t tell me you follow the guidance of one of the “financial entertainers” either. As I’ve said before, “You can’t get financial advice through the media…just like you can’t get a haircut over the phone.”

        If you’re married, don’t tell me your spouse has it all under control. Trust me on this; we’ve yet to meet that spouse that had it “all under control” once we’ve done a thorough & comprehensive review of all of their moving parts. I’ve met too many widows that had that same thought…only to find out they were financially devastated because their late husband “had it under control”. I’ve met a bunch of business owners that felt the same…until their partner died…they thought it was “all under control”.

        Here’s the deal…if you just write three small words at the top of a legal pad for me that say WHAT HAPPENS IF? Now start filling in the page with all of those things that come to mind…when you’re done, I’ll add another 40-50 for you, because it’s what I do all day long with my clients. What am I doing, by the way? I’m stepping up to the plate and becoming “your financial backstop”. If you let me do my job right, I’ll be more than that as well…as my clients have become my friends…and my friends have become my clients.

        So I ask you? Who has your back? Take a good look behind you and see who is there…or who you think is there…or who just might be there that you’re unaware of. I’ll bet that Starbucks latte that you don’t have a financial backstop…so it sounds like you might just need me after all…and when “life happens”…if you let me do what I am trained and skilled to do…I’ll be right there. As our Senior Partner says often, we are the third most important person in one’s life behind their doctor and their minister…and not only do I believe that…I do what I can to live it as well.

Best,
Brian
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

COPYRIGHT 2010, Brian E. Carden

The Bank Called You

JUNE 2010 INSIGHT

…from the desk of Brian Carden, Financial Advisor

        OK, it’s finally summer…locally the weather is warm, flood damage is slowly being repaired, and Nashville is slowly coming back to normal. In spite of all of the economic negativity being spouted on the daily airwaves, Internet, & alleged “financial gurus”, some Nashvillians are doing very well for themselves. In last month’s rant “Who Says” I challenged several of the financial myths that are continually being floated around by the above mentioned sources of information. This month, let’s look to measure some of the financial products where people are placing their money, circa 2010.

         I’ll set the stage. You’ve probably heard that the 2000’s have been called “The Lost Decade”. From an equities based perspective, it’s true. But let’s look at a couple of other current issues.

1. The Russell 3000, the broadest index of US based stocks, had an average annual return for the last 10 years of -.2%. All that risk for virtually zero return. (Ned Davis Research)
2. Money markets and CD’s are at unattractive lows. Bank savings accounts are at 0.1%.
3. 80% of all mutual fund inflows for 2009 and 2010 are going into bond funds. (Strategic Insight, 2010) First consumers are chasing returns…now they’re running from them!
4. The US Government has issued bonds (or I.O.U’s) in excess of $42 trillion and most of them are being bought by our friends in the “BRIC countries “ (Brazil, Russia, India, & China). If they quit buying…we will have to incent them by raising interest rates to make them more appealing. If that happens, the resulting correction of the entire bond fund market could go crashing down just like equity funds did in 2008.

        So just exactly where are you investing your dollars? It’s a conundrum, isn’t it? What if you could use a series of financial strategies and financial tools to create “The Bank Called You”? If you could do that, what would it look like? First of all, you would have to build the actual structure, and then put deposits into it systematically to make it grow. You would want it to have a reasonable rate of return, say 4%...and if it could be a guaranteed rate that would be even more attractive. Of course, there would be some annual expenses to running your bank as well.

        Would you like to grow your deposits in a tax-favorable environment, and maybe even take dollars from your bank in the same way either through withdrawals or loans? This way you could create some effective exit strategies that many of your other investment alternatives might not have. To make it as safe as possible, you would need protection in place against creditors, predators, and life events such as illness, accident or death.

        We’re just strategizing here…but if you’ve been a loyal reader for the last six years, you hopefully know two things. First, everything you read has been approved by a compliance officer for accuracy and correctness. Secondly, I’m not going to put anything in print I can’t back up. I’ve generally finished these pieces with a call to action…either in a response via e-mail, or to take me up on that Starbucks Latte that’s been available to you this entire time. “The Bank Called You”…has a nice ring to it, doesn’t it?

Sincerely,
Brian
Brian_Carden@PeachtreePlanning.com
www.briancarden.com
www.thebankcalledyou.com

“Who Says?”

MAY 2010 INSIGHTS

…from the desk of Brian Carden, Financial Advisor

           It’s amazing to me how people can believe the things that they do with no basis of fact other than their own opinions.  With football season only a couple of months away, I am reminded of one of my favorite actions on an NFL football field.  That’s when Jeff Fisher sees a bad call from one of the officials and throws the infamous red flag.  In a kind and legal way, he’s calling “Bull Hockey” (with references to Col. Potter on MASH) on the official’s ruling.  (I don’t think my compliance officer who reviews and approves all of my writings would allow me to say what I would like in this instance anyway…)

           I carry a pocket full of imaginary “BH flags” with me on a regular basis.  Usually they get thrown when I see Sam Waterston on a Sunday ad telling you how successful you can be by investing on your own with the firm that pays him well to read those cue cards…or when I see people walking around during the ad with a big number in their hands.  If I was to waste my time by listening to the “financial entertainers” on the airwaves, this city would quickly be out of red fabric in a matter of days.  I also throw them in my own office when reviewing the financial documents of potential planning clients.  They thought they had a financial advisor, but in fact had some policies and a few statements that had no relevance to what was important to them. 

           One of my favorite quotes is from John F. Kennedy, when he said "The great enemy of the truth is very often not the lie--deliberate, contrived and dishonest--but the myth--persistent, persuasive and unrealistic."  Financial myths are abundant…they can be so easily disguised behind a spokesperson, financial entertainer, or even more scary, a product peddler acting like an advisor.

           So who says?

• You will retire in a lower tax bracket!
• You will get a double digit return in stock mutual funds over your lifetime!
• You will retire from your chosen career on your terms!
• You paying off your house early is a good financial decision!
• You buying term insurance your entire life is in the best interests of your loved ones!
• You maximum funding your 401(k) is the best financial decision you can make!
• You not having a properly drafted and executed will makes any sense whatsoever!   
• The government will take care of you when you get sick and elderly!

           Well, guess what?  To everything above, I throw my plethora of “BH flags”…my myriad of symbols saying that everything that is above is a “financial myth”.  The fundamental difference between me and all of the “financial entertainers” and other posers out there is that I CAN PROVE THAT THEY ARE WRONG!!!!  Not only can I prove it, I can validate why these “financial myths” can absolutely destroy all of those values that we would have discovered together during our first meeting.  Whew…I’m tired…enough ranting for this month…the Starbucks latte is on the table…waiting for you to hit the email button & take me up on my offer.

Best,

Brian
brian_carden@peachtreeplanning.com

Hardware or Software

APRIL 2010 INSIGHTS

…from the desk of Brian Carden, Financial Advisor

        No this is not about computers, so please keep reading. For what it’s worth, I refused to get a Blackberry up until 2 years ago, when our team forced me to have one…I’m not a technology guy in any shape form or fashion…trust me! I have 6 remotes at home because I refuse to consolidate to one!!! After 28 years in this industry and many of those years of wondering why my career chose me and not vice versa…I’ve been blessed to be able to turn my “career into a calling”. That means the man you meet in social settings is the same guy that will be across from the conference table in our office…or the one that is alongside you when “life happens” and other than a doctor, or a minister, I’m the other person you might need the most.

        So many people that I meet are defined by what they do. However, what they do is not who they are. Herein lies my dilemma…as I’ve said before, “You really don’t know what I do.” In networking situations, to keep it very brief, I’ve often referred to myself as a “forensic financial psychologist”. Here’s how that breaks down:

1. Forensic, meaning I dig up all of your policies, statements, wills & tax returns, etc. to review and figure out the all of the moving parts of your financial stuff.
2. Financial means $$$$, pure and simple, because you probably have thought about your money several times this morning before reading this.
3. Psychologist because it’s all about the emotions, values, fears, wants, needs, desires, hopes, etc…that surround your money. Granted, I am not a psychologist, but emotions come into every conversation I have with clients and prospective clients.

        Why “Hardware or Software”? It’s very simple actually. Hardware is nothing but product sales. “Oh, I’ve got an insurance agent.” “My financial advisor manages my IRA, but I never talk to him…I’m probably too small of a fish for him anyway”. “I used to have an advisor, but he’s changed firms so many times, I’ve lost touch with him.” “I bought my life insurance on the Internet because it was cheap.” Trust me; I’ve heard all of these, and more! Hardware says since your account balance has gone down 40%, let’s move it to something safer…like another product!

        Software, on the other hand, is all about being a trusted advisor…one that listens, asks a lot of questions that a lot of people are scared to ask you. It’s those questions that don’t get asked that keep you up at night, isn’t it? Software is all about learning about what is so important to you about your money…your family...your cash flow. Oh yeah, it’s also about the emotions surrounding the psychology factor that I mentioned above. It’s about planning…for today, tomorrow, and the next generation that follows you.

        There’s a ridiculous misconception in financial planning, and that is “My financial advisor manages my money.” I don’t think so…that’s hardware. My role is not to manage your money, per se, but to manage you, your expectations, your emotions, and everything in between. How do I get paid? Well, just like a computer needs software to run…in order for your financial plan to be implemented correctly and managed as we go, the appropriate mix of products have to be in place first. I get paid to implement the products (hardware) so that I can walk alongside you as your trusted advisor (software).

        So again here we are…the Starbucks latte is waiting for you. You tell me…what does your financial picture look like…full of hardware, perhaps? Let me know how that is working for you...

Best,
Brian
Brian_Carden@PeachtreePlanning.com

COPYRIGHT 2010, Brian E. Carden

Exit Ramps

MARCH 2010 INSIGHT

...from the desk of Brian Carden, Financial Advisor

Listen to the Podcast and click the play button below.

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        On January 29^th, when Nashville was getting ready for its big snow storm, I was in Atlanta at our annual year-end celebration and awards banquet. We had all gathered for a firm picture, with over 100 staff members, advisers, and partners in attendance. As soon as the picture was over, our Senior Partner said very clearly, “Everyone from Nashville! Hit the road & let’s get home ASAP!”

        Needless to say, it was a very, very long day. I drove & it took me 7.5 hours to get home, and the last 100 took probably 5 hours of that. We hit some serious snow on I-24…and an 18 car pileup to boot. My friend and associate Janet was my “co-pilot” and somewhere around Tullahoma she asked me if we could stop and take a break. So we decided to pick an exit, as we had choices. So we did, regrouped, filled up with gas, knocked the 50 pounds of ice off my car and headed home best we could. My “endgame” if you will, was to get to the most appropriate exit so that we could get back to our office here in Brentwood. That exit was Old Hickory Blvd. The key thought here is that I was able to create and implement my own “exit strategies”.

        Regardless of what you might think…everything has an exit strategy. Your career, your retirement accounts, your business, and yes, even your life. Traditional financial planning seems to forget this as people are still being led to believe that they can retire on their terms…using a fictitious rate of return on their assets that we haven’t seen in over a decade. (12% according to the “financial entertainers”). Somewhere, somehow…someone convinced Americans that they should contribute the absolute maximums to their 401(k) plans because they would retire in a lower tax bracket.  This one still dumbfounds me. I don’t know about you, but everything coming out of Washington these days says we’re going to get a lot of income tax increases over the remainder of our lives. Here’s a new concept for you: REVERSE TAX PLANNING. (Future article forthcoming)

        If you are gainfully employed by a company, the owners have an exit strategy for you…they just haven’t told you yet. If you own your own business, or are an entrepreneur, you’re probably wondering how to “retire from your business”. From my experience with my business owner clients, owning a business is like going into the House of Mirrors at the fair. Remember that? It was easy to get in…fun to be in there for a while…but when you wanted out, you wanted out…and you wanted out NOW!

        Stephen Covey said it best when he said “Begin with the end in mind.” Everyone knows this quote, but very few implement it. It’s easy to write a business plan and start a new business.  It’s easy to fund a 401(k) or IRA. It used to be easy to get a job in corporate America…but just like the House of Mirrors, how are you getting out...on your terms!!! Traditional financial planning and the “financial entertainers” say that you’ll be fine and that the market, inflation, taxes, and life events will not be that big of an issue. However, I totally disagree. Our firm views your life in four distinct stages.

1. Accumulation. You will always be on this line…making contributions and growing assets…probably for your entire life.
2. Preservation. If you’re in your late 40s or older, you’re probably thinking, “I can’t be this aggressive anymore”. Especially with this 10 year Bear Market that has no end in sight. Where’s that 12% average return these days?
3. Distribution. Which would you prefer; telling the market that you are going to retire on your terms…or having the market telling you that you will retire on their terms? Shouldn’t you start planning this now and not 3 months before you declare “I’m retiring”?
4. Legacy. So you’re going to retire on your terms, in a lower tax bracket, still get a strong return on your assets, while taking monies out, and you will never run out of money while you are alive…leaving a legacy of love (and hopefully assets) to those that mean the most to you. Let me know how that works for you.

        Last month I said that “You really don’t know what I do”…and I stand by that statement…with a Starbucks latte as a side bet. The bet still holds. If you’ve truly got it all figured out…show me. I’d love to see what your “exit ramps” look like.

Best,
Brian
Brian_Carden@PeachtreePlanning.com

Copyright 2010, Brian E. Carden

You Really Don’t Know What I Do

 

FEBRUARY 2010 E-ARTICLE

…from the desk of Brian Carden, Financial Advisor

            We’ve had this conversation around our office lately, and I’ve had it with several friends as well in social settings.  The reason I say this is because the stereotypes of being a Financial Advisor are, in my mind, deserved in a lot of situations.  However, in the case of me and my peers here at Peachtree Planning, those stereotypes are not even close to being accurate.  I hear all the time “I know what you do”…“you just want to handle my IRA rollover” or “you just want to sell me insurance”.  Wrong.  Way wrong.  What I do see most of the time is someone, maybe like you perhaps, that thinks they’ve got a financial advisor, but what they’ve actually got is statement full of investments and/or life insurance policies and that they are OK because of it.  That isn’t planning…those are products.

            We all know what the word “assume” spells…do you really want to assume you and your family will be able do the things that you want to do…or do you want to really know that you will?  If you were one that bought a “financial plan” (and I use that term loosely) that was in a nice notebook, full of facts, figures, percentages, etc….that book is totally useless.  It might have been a nice snapshot of where you were at the time, but today, all bets are off. 

            Anyone can go to the Internet and find all kind of calculators to project numbers.  So are you still using the assumption that you’ll get a 10-12% average yield on mutual funds, that’s what the “financial entertainers” say, right?  However I will state with absolute fact that the Russell 3000, the largest index in the US, has averaged a negative -.2% for the last decade?  So for all that risk in equities…for all that volatility…for all that emotional frustration because your accounts weren’t growing…you got a -.2%. If I look back over the last 30 years, you would have gotten a 10.55% average annual return in equities…but then again, with an ultra-conservative portfolio of 80% bonds/20% stocks, I would have gotten 9.30% over the same time frame…classic tortoise and hare story.   (Read this paragraph again…the risk hasn’t been worth the reward, has it?)  Again…that isn’t planning…THAT’S MATH!!

            So what do I do?  First of all, I listen…and ask a lot of questions…about what is important about you, your family, your career, your future, your dreams, desires…and oh yeah, your money.  I’ll bet you a Starbucks latte that even if you are making a good income, doing your best to meet those objectives, and maybe even you’ve got a financial advisor…that there are disconnects and inefficiencies in your life that that will keep you from reaching everything you told me in that first meeting. 

            Next, I analyze every moving financial part in your life…everything.  Then we stress test what you’re doing, and show you where those disconnects truly are.  Like a conductor directing a symphony, we find out what instruments are not in tune, and we make them so…without using an extra dollar that is already in your life.  Maximum efficiency of your dollars and meeting your personal dreams, wants, and desires are our optimum goals for you.

            Finally, we continue to build a relationship with you that helps us stay on track…call us a “Financial GPS” as we will always know where are in relation to our plan.  When was the last time your advisor did a full comprehensive review on your total financial affairs?  …and I mean a complete and absolute review? 

            That’s what I do…and I can help you…if you will let me…the bet for the Starbucks Latte is out there.  Hit reply and let’s find out who wins.

Best,

Brian
Brian_Carden@PeachtreePlanning.com
www.briancarden.com

 

Copyright 2010, Brian E. Carden

It's Time

            Yes, it’s time for my Christmas article.  The “It’s Time” title comes primarily from a new mantra that has been used at UT football games this year.  To think that so many Vol fans are excited at a 7-5 record is somewhat incredible, but it’s their optimism for the future of our team and our new coach that drives that emotion.  It is amazing how attitudes have changed regarding my Alma Mater in the last 12 months…and the same applies to life in general for many of us.   

 

 

           

            It’s time for us to forget the frustrations of the year, the economy, the continual negative barrages of the media, and every non-positive thing that has happened this year…for a little while.  Just like you, I could list a bunch of stuff that didn’t go according to my plan created when I did my goal setting for 2009.  In fact, that list could fill up that page…but that doesn’t solve much, does it? 

            In looking back at some of my previous December articles, “Memories of the Sears Wish Book” was fun…for those of us that remember it, there was nothing like it…that was the most dog-eared, circled, marked up, and prioritized publication ever brought into the Carden household.  Last year’s article was hard, because I wrote about my best friend Duffy, and the 15 years of joy he gave to me and my family…and how hard it was to be without him at Christmas.  That picture of him lying under the tree is still taped to my monitor as I write this…and I do talk to him often. 

            The one that means to most to me was written December 2005 entitled “My Christmas Blessings to You” and it’s special because it’s about two very important things in my life…my family, and the relationships I have with my friends and clients.  My greatest gift is (and I hope will be for as long as God allows it) to have all of my family around the tree at Mom & Dad’s house.  I used to think that 85 was old, and that’s what Dad will be next month.  He might not be as fast as he used to be, but he’s as sharp as a tack.  Last week he & I went to a UT basketball game together…just like the good old days…and he hoofed it from the parking lot to our seats and back again…not missing a step!  And he climbed a bunch of them!

            Being home at Thanksgiving reminded me just how blessed I truly am.  And writing this reminds me of the same when it comes to my friends and clients.  I can’t remember working any harder than I did this year, and having more fun doing it…especially with everyone here at Peachtree.  Dad has always said that the day he starts worrying is the day that everyone stops giving him a hard time…and it’s no exception here.  I think I’ve compiled about 3-4 new nicknames around here just this year.  Needless to say, we love what we do, we love who we work with, and we love the clients that we are charged to take care of.  Our Senior Partner and mentor says that we have the third most important occupation in a person’s life, behind physicians and ministers.  We truly believe that and do everything possible to “walk the walk”.

            With that in mind, I truly thank each and every one of you for your friendship, your readership, your trust, and your faith in me and the team here at Peachtree.  My Christmas wish for you is that if there is something that kept you from having the year you anticipated, whatever that one wish might be, that it’s granted to you.  2010 is a brand new year, and it will be full of opportunities and great things!  If you’re reading this, just back away from your computer, close your eyes for a minute or two, and just think of that wish…It’s Time! 

Merry Christmas and Happy Hanukkah!

Brian

Copyright 2009, Brian E. Carden

Brian_Carden@peachtreeplanning.com

www.briancarden.com

The DaVinci Code & Financial Planning

            Almost every church sign I’ve driven past in the last couple of months has advertised a sermon on this book.  Some pastors went as far as to say, “I’ve forbidden my congregation from seeing it.”  Sorry…I read the book over a year ago…and saw the movie as well.  Both were entertaining…besides, I don’t know what the fuss is about.  Because of my faith, I know the truth and where to find the answers to those spiritual questions I ask myself regularly. To me it comes down to the fact that regardless of what one might think of the factual relevance of the storyline, when you go to Borders to buy a copy of the book, it’s always going to be in the Fiction section.

            Just as my faith helps me define the truth spiritually, my professional experience, education, and beliefs as a financial planner allow me to know the difference between “Financial Fiction” and what is actually true.  In the movie “The Man who Shot Liberty Valance” starring Jimmy Stewart, the hero is not made nor born, but manufactured by the storywriters of that time.  As the editor of the newspaper said, “This is the West.  When the legend becomes the fact, print the legend.”

Here are a few examples of “Financial Fiction”…Liberty Valance style:

LEGEND:	You don’t need a financial advisor to create wealth…do it yourself!
FACT:	From 1984-2004, the S & P 500 average annual return = 12.2% The average investor = 3.5% (Dalbar)
LEGEND:	Knowing what to buy & sell and how to time the stock market is the key to wealth accumulation in investments
FACT:	Nobel Prize winning Study says only 2% market timing, 4% investment selection, 94% success rate with Asset Allocation via Modern Portfolio Theory. (Nobel Prize in Economics, 1990)
LEGEND:	We’ve all got plenty of time to save for retirement.
FACT:	41% of American households headed by individuals ages 45-54 do not have any retirement savings what so ever. (Congressional Research Service)
LEGEND:	The Dow Jones Industrial Average and the S & P 500 index are the leading indicators of how the US stock market is fairing.
FACT:	Only 30 stocks make up the DJIA. (dowjones.com) 22% of the largest US companies are not a part of the Index. (Russell, Inc.)
LEGEND:	Term insurance is the only type of life insurance you’ll ever need.
FACT:	Only 1% of all term policies issued result in death benefits to the named beneficiaries. (Penn State Study, 1994)

 

            So ask yourself, in your mind, what is legend and what is fact…and where did you get your information.  Unfortunately, Borders doesn’t have a “Financial Fiction” section, but if they did, it would probably be full of hundreds of books and magazines with “legendary” titles & cover stories.  If you are tired of Fiction and are ready to move over to the History and the Psychology sections, (remember, money has emotion) maybe it’s time to hit reply.

 

Regards,

Brian

www.briancarden.com               

Copyright 2006, Brian E. Carden

 

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